Powercon Wind Energy Ltd trading as Carrowleagh Windfarm v Commissioner of Valuation
| Jurisdiction | Ireland |
| Judge | Mr. Justice Garrett Simons |
| Judgment Date | 09 October 2023 |
| Neutral Citation | [2023] IEHC 542 |
| Court | High Court |
| Docket Number | 2021 No. 423 SS |
In the Matter of a Case Stated Pursuant to Section 39 of the Valuation Act 2001
[2023] IEHC 542
2021 No. 423 SS
THE HIGH COURT
Proinsias Ó Maolchalain for the appellant instructed by Eversheds Sutherland LLP
Andrew Fitzpatrick SC and David Dodd for the respondent instructed by the Chief State Solicitor
JUDGMENT of Mr. Justice Garrett Simons delivered on 9 October 2023
This appeal comes before the High Court by way of a case stated from the Valuation Tribunal. The unusual feature of the case stated is that the rateable property, a wind farm, straddles two rating authority areas.
The contingency of a rateable property being situate partly in one rating authority area and partly in another is expressly addressed by the Valuation Act 2001 (at Section 61). The default position is that the overall value of the property is to be apportioned between each of the rating authorities concerned. Here, a dispute arose at the hearing before the Valuation Tribunal as to whether this section could be relied upon in circumstances where separate valuation certificates had not, seemingly, been issued by the Commissioner of Valuation in respect of the two parts of the wind farm.
The Valuation Tribunal declined to make a finding on this dispute on the basis that the point was not properly before the Valuation Tribunal because it had not been advanced as a ground of appeal in the notice of appeal. The principal issue to be addressed in this judgment is whether the Valuation Tribunal erred in law in adopting this approach. The other issues in the case stated only properly arise for determination in the event that the Valuation Tribunal's approach on the first issue is upheld.
The contingency of a rateable property being situate partly in one rating authority area and partly in another rating authority area is addressed by Section 61 of the Valuation Act 2001. There are two possible approaches which may be adopted as follows. The first approach is that the overall value of the property may be apportioned between each of the rating authorities concerned. The second, alternative approach is that the property may be valued as if it were, counterfactually, situate in a single rating authority area. Put otherwise, the legislation contains a form of deeming provision, whereby a property may, at the discretion of the Commissioner, be deemed to be situate in only one rating authority area. The entirety of the rates referable to that property would then be paid to that rating authority.
The first of these two approaches represents the default position: unless the Commissioner has exercised his discretion to deem the property to be situate in only one rating authority area, the property is to be valued as a single entity and the amount assessed is to be apportioned between each of the rating authorities concerned. This is regulated by subsections 61(2) to (4) of the Valuation Act 2001 as follows:
“(2) In relation to relevant property that is situate in 2 or more rating authority areas, the Commissioner shall apportion between each of the rating authorities concerned the value of the property determined under this Act in such manner as he or she considers appropriate and so much of that value as is so apportioned to each such authority shall, accordingly, be the value of the part of the property situate in the area of the authority.
(3) Any provision of this Act conferring a power to issue a valuation certificate or a new valuation certificate shall, in relation to property that is the subject of an apportionment under subsection (2), be construed as requiring that there be issued, on the occasion of the power being exercised, a separate such certificate to each rating authority in respect of which that apportionment is made.
(4) The value of the property which is stated in such a certificate shall be the value of the property as provided for in the apportionment under subsection (2).”
Importantly, these provisions envisage that the Commissioner will issue a separate valuation certificate to each rating authority in respect of which such an apportionment is made. In the present appeal, it appears that a valuation certificate was only issued in respect of that part of the wind farm which is located in the rating authority area in respect of which the revaluation exercise was being carried out. (The treatment of the second part of the wind farm does not seem to have been expressly addressed in evidence: there is no direct evidence that a second valuation certificate was issued). The Ratepayer had sought to raise an objection at the hearing before the Valuation Tribunal to the effect that the apparent failure to issue a valuation certificate in respect of that part of the wind farm which was located in the other rating authority area precluded the Commissioner from relying upon Section 61.
The case stated concerns the valuation of a wind farm which straddles the boundary between County Mayo and County Sligo. The overall wind farm consists of sixteen wind turbines and a grid connection. Thirteen of these wind turbines and the grid connection are situate within County Mayo. The remaining three wind turbines are situate in County Sligo.
The valuation certificate, the subject-matter of the appeal to the Valuation Tribunal, was issued in the context of a revaluation exercise which has been carried out in respect of County Sligo. The valuation order is dated 23 November 2015. The “ valuation date” specified under the valuation order for the purposes of Section 20 of the Valuation Act 2001 is 30 October 2015.
One of the principal legal issues which required to be determined by the Valuation Tribunal concerned the correct approach to be adopted in valuing a rateable property which straddles two rating authority areas. The parties advocated for radically different approaches and the Valuation Tribunal was called upon to determine which is the correct approach. As explained presently, the Valuation Tribunal failed to do so.
The rival contentions of the parties only came into focus for the first time during the course of the oral hearing before the Valuation Tribunal. On one side, it was contended that the three wind turbines in County Sligo should be valued as a separate property; on the other, it was contended that the entire wind farm should be valued as a single entity, and that the (aggregate) value then apportioned between the two rating authority areas. These rival contentions are elaborated upon below.
The Ratepayer's contention had been that the valuation should be made on the assumption that the hypothetical tenancy would be confined to that part of the overall property which is situate within the relevant rating authority area. On this assumption, the hypothetical tenancy would consist of the three wind turbines situate in County Sligo. The three wind turbines would have to be valued on the basis that they were being leased separately from the balance of the wind farm and thus would not have the benefit of a grid connection. It was contended that such an arrangement would likely be less attractive to the hypothetical tenant and that the divisible balance should be adjusted accordingly to reflect this. It was further contended that the divisible balance should be split 50:50 as between the hypothetical landlord and tenant.
The response made, on behalf of the Commissioner, to this argument had been to cite the provisions of Section 61 of the Valuation Act 2001. Counsel on behalf of the Commissioner is recorded as having submitted that the Commissioner had exercised the power conferred upon him under subsection 61(2) to value the Carrowleagh Wind Farm and as having apportioned the value attributable to the three turbines in Sligo County Council's area to that rating authority. It was further submitted that the decision to apportion cannot be reviewed by the Valuation Tribunal as its jurisdiction is delimited, by Section 34 of the Valuation Act 2001, to considering an appeal against the Commissioner's determination of value. On this analysis, whereas the Commissioner's determination of the value of the entire wind farm would be amenable to an appeal, the subsequent decision to apportion that value as between the two rating authority areas is unappealable. The Commissioner has since confirmed in his written submissions of 28 April 2023 that he stands over this analysis.
It seems that the valuer acting on behalf of the Ratepayer had opted to respond to the Commissioner's submissions at the hearing rather than go first, with the result that the “ last word”, as it were, went to the Ratepayer. The Ratepayer's valuer is recorded as having submitted that—if Carrowleagh Wind Farm had been valued and that value was apportioned—the valuation had no impact whatsoever for the rating authority of Mayo County Council because no revision of the valuation of the wind farm had been carried out: only that part of the property in County Sligo, comprising three wind turbines, had been valued and only one rating authority had been notified of the valuation.
The Valuation Tribunal appears to have accepted that the Commissioner was entitled to value the wind farm as a single property and to apportion the value between each rating authority area. This, presumably, is the reason that the Valuation Tribunal's determination does not directly address the Ratepayer's argument that the hypothetical tenant would require a larger share of the divisible balance to compensate for the hypothetical tenancy being confined to three wind turbines. This argument falls away if the valuation is to be made by reference to a hypothetical tenancy which comprises...
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